Survival in the auction jungle

You had better do your homework before you bid for that elusive "bargain"
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The Independent Online

Among those waiting for the auction to begin, it was not difficult to pick out the first-timers. Unlike the dealers lined against the back wall, they wanted to chat. As the rules of the sale were spelt out, they exchanged rueful smiles, only too aware that at the drop of the hammer the waiting would be over.

Among those waiting for the auction to begin, it was not difficult to pick out the first-timers. Unlike the dealers lined against the back wall, they wanted to chat. As the rules of the sale were spelt out, they exchanged rueful smiles, only too aware that at the drop of the hammer the waiting would be over.

Auctioneers say they can always spot the ordinary buyers. They look nervous and at the end of the bidding, are likely to shriek with joy or burst into tears. But given that it's such a decisive method of buying a home, buyers are drawn to the auction room, upping the emotional stakes along with the prices.

Unlike the professional, whose profit margins will dictate when to quit, those who intend to live in a property will go that bit further. They have already set their hearts on a place and invested time and money in preparing for the sale. A home that looks particularly tempting could have as many as 50 people viewing it.

At Winkworth's recent national auction in Kensington Town Hall, west London, 147 properties were listed in the catalogue (though a few had been sold in advance, the vendors having been advised that an existing offer was not likely to be exceeded on the day). The sale began with a leasehold flat in Reigate and an auctioneer whose manner would have inspired confidence in the most nervous of bidders. As the pages turned, several lots failed to reach reserve price. "Don't disappear, we will negotiate with the highest bidders,'' we were told. The almost-rans were also advised to leave names "in case of problems".

Not that there should be. At the fall of the hammer, you are obliged to buy. One woman whose enthusiasm for the event was not matched by her financial arrangements was on the point of acquiring a £5,000 flat when she was asked whether she was sure she could proceed.

The properties that most buyers are interested in are unmodernised houses and flats in good, well-established residential areas. The wreck of a cottage with holes in the roof and no running water tends to have limited appeal, but the prospect of a structurally sound house that needs bringing up-to-date is a manageable project. It's also likely to meet the criteria of banks and building societies.

Just such a house, and the prettiest in the catalogue, had drawn Jane Barr and Euan Hunter from Grimsby. They had set their heart on a six-bedroom period house in one of the nicest areas of their home town.

The lot came up well into the sale and under the command of an auctioneer with the style of a seasoned horse-race commentator. A proxy vote of £35,000 was immediately bettered until only Jane Barr and a telephone bidder were left to fight it out. She faltered at £43,000 but on the urgings of her boyfriend and the encouragement of the auctioneer, increased her bids. At £46,000 she threw in the towel and with it all the plans they had made.

Visibly upset, she said afterwards that £43,000 was her absolute limit. "We really didn't think it would go for much above £40,000, and one surveyor put it in the £30,000 area because the original features have gone and it's in terrible condition. But we had set our heart on it. I don't suppose we will get another chance to buy there."

David Tribe, director of Winkworth Auctions, said the telephone bidder, who was buying for his daughter, was thrilled. "We had a record number of telephone bids at the sale and 16 out of the 47 got the property. One young man had already tried to buy a particular house but couldn't quite get his act together. He rushed around and got all his paperwork done for the auction - and ended up getting it at the previous price he had offered."

Mr Tribe said it was important that prospective buyers should do their homework. "We go out of our way to point out problems if we know about them. You can end up taking on a hornet's nest." Solicitors were available at the auction for consultation. But legal inquiries should be made in the weeks before the sale.

Joanne Toft and her family had come to test the water, although their solicitor advised against bidding for a flat in Aylesbury, Buckinghamshire. "It cost us £700 but apparently there are huge problems with the lease. But now at least we know what an auction is like. It's nothing like a car auction where they take bids off the wall. I'm sure we'll be back."

Although the public perception of buying at auction is changing, for many people the notion lingers that there are bargains to be had. They recall the flood of building society repossessions in the early Nineties. But even if a mortgagor is the vendor, the auction is a not a choice of last resort, and auctioneers are obliged to seek the best possible price.

Mr Tribe said the typical house coming to auction at present is on a new development where young couples find it easy to buy but far harder to keep up with the payments.

Auctions are prime hunting grounds for clear-headed investors. Jonathan Prole and his partner successfully bid for a large house in Essex divided into three flats which was close to a tube station.

It is not the first property he has bought at auction. "We knew our limits and we would not have gone even £1,000 above. I think it's a very fair way of establishing the true value of a property and we would sell at auction as well as buy." He advised hopefuls: "Go and watch before you take part."

The couple who had a costly lapse of concentration a few years ago at an auction would doubtless agree. They thought they were bidding for a flat, but found themselves owning a 15ft triangular piece of shopfront. They were forced to complete.

Dates of public auctions are published in the Property Bid List, Faxwise Auction Information Service, local and trade press. Winkworth is holding its next auction on 27 January. For a catalogue, ring 0891 615599

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